Interviews

“Important changes in the current business environment would be necessary to make Albania achieve in the near future double digits growth! “

FIAA: What are the core services that Deloitte Albania offers?

Mr. Caslli: Deloitte Albania offers a suite of exceptional quality services in Assurance & Audit, Tax, Legal, Financial Advisory and Consulting. Numerous private companies, non for profit organizations and public institutions rely on the opinions and judgements of Deloitte Albania auditors. Businesses from any industry can count on us to provide them with the most basic operational services such as bookkeeping and payroll; as well as less routine services such as advisory on M&A, valuation, debt and equity financing, restructuring, liquidation. Our tax and legal experts are leaders in ensuring compliance to and optimization of all applicable legislative and fiscal requirements, be they local or international. Another core service that Deloitte Albania offers is consulting in various areas – human capital, technology, strategy and operations.In a few words any business in Albania needs business advice to be able to offer top services.

“Shell wants to assist building a thriving energy industry in partnership with the Albanian Government”

FIAA: What is your role and background?

Mr. D’Souza: Earlier this year, I was delighted to be appointed as the Country Chairman and Commercial Manager for Shell’s activities in Albania. I have previously lived and worked in numerous countries around the world including in Africa, Asia and Australia across nearly all of Shell’s business’s: Upstream, Integrated Gas, and Downstream.

What are your impressions of Albania?

I was thrilled at what a beautiful and pleasant country Albania is to live in. The country has incredible natural beauty that will undoubtedly make Albania a tourist haven. But perhaps the most notable thing is the positive transformation we see in Tirana itself – improving infrastructure and a thriving atmosphere. From a Shell perspective, we are also committed to the development of this beautiful country.

What is Shell’s upstream project in Albania?

Shell is currently appraising an oil and gas prospect called Shpirag near the city of Berat. We operate under a contract with the Albanian government. As a part of that Shell puts significant amounts of dollars upfront to fund the exploration and development – with significant risk to Shell as it is exploration after all. In the chance that we are successful, the benefit is then significantly shared with the Albanian Government.

“We want to strengthen the role of the ombudsman for all entrepreneurs operating in our country”.

FIAA: What are your objectives and priorities as Minister of Entrepreneurship, a newly created Institution in Albania?

Mrs. Qato: The mission of the Minister of State for the Protection of Entrepreneurship consists in the reduction of the existing gap between entrepreneurship and the public administration, by influencing in the creation of an adequate environment so that enterprises can work at their best capacities and increase their profit.

My role as a government ombudsman will result in the direct solution of the addressed complaints by various entrepreneurs. However, above all, my office will work for the removal of those administrative and corruptive barriers for which the government has already launched a deep reform of deregulation and we also plan on restructuring the inspectorates and government agencies that co-operate with enterprises.

In case of problems or miscommunication, our office mediates between any central or local institution in the country and the entrepreneur that claims an injustice. By defending the interest of enterprises through technical and legal advice, we aim at promoting the synergy of all parties and the interaction between business and government.

“An independent, functioning and reliable justice system is a basic element required for all!”

FIAA: During the first four years of the operation phase of the Ashta Hydro Power Plant, what have been the most significant challenges that you have had to overcome?

Mr. Dietmar Reiner: We have invested more than 200 Million EURO until end of 2012 to build a state of the art Hydro Power Plant. VERBUND and its partner EVN were the first large–scale private investors entering the Albanian Energy Sector. Due to the difficult situation in 2008, the time when the concession agreement has been signed, it was agreed with the government to enter into a long-term power offtake agreement. This agreement entered into force in April 2013, until June 2016 KESH was the off-taker, but then it was transferred to OSHEE. In the last four years there were a lot of challenges in the Albanian energy sector, especially in the downstream business, with the difficult situation in the distribution system and the supply to endcustomers. These difficulties also influenced our business; we were mainly suffering from payment delays which created for some periods huge arrears mainly to our lenders. Due to the background of our shareholders as large public utilities in the energy sector in Austria, the understanding of the situation and our belief in the success of the necessary reform in the energy sector, we and also our shareholders and lenders kept calm and focused during this time.

“It is important that state institutions play a greater role in creating a business environment able to retain current investments and attract new ones”

FIAA: What is the IFC’s current long term finance investment strategy in Albania?

Mrs. Qorlazja: Thank you first of all for giving me the opportunity to talk about IFC in general and its work in Albania.

IFC was established in 1956 as part of the World Bank Group to support private sector investment in emerging markets to create jobs and raise standards of living. IFC’s financial products enable companies to manage risk and broaden their access to foreign and domestic capital markets. Our financial products consist of fixed and variable rate loans extended to the private sector, which finance both early-stage companies and expansion projects. IFC also makes loans to intermediary banks, leasing companies, and other financial institutions for on-lending. In addition to lending, IFC engages in equity investments that provide developmental support and the long-term growth capital the private sector needs. IFC invests directly in companies’ equity and also through private-equity funds.

FIAA: During your time here in Albania, have you seen any change in the operating environment for foreign businesses in the country?

Mr. Larsen: Yes – several laws which have been passed, for example. I think the law on strategic investment is beneficial for investors that want to do business here in Albania. It gives businesses a one-stop window in terms of interaction with the government, and so on. We already have that kind of one-stop window in the energy ministry and in the project implementation unit which has been established in the Ministry of Energy, and I believe that the law on strategic investment should help all businesses.

The fact is that Albania is in a period of active reform and we are hopeful of seeing changes in the energy sector as a result. The whole energy sector is undergoing reform and the new energy law passed last year makes commitments to changes in the institutions, for example, liberalization of the market for power trading. We were originally expecting these things to be in place by now, but they will come. The government is committed to reform and it will make it happen. I think it will take some more years still before we have a fully functional power market here in Albania.

“Justice Reform will contribute to creating a more predictable and transparent business environment in Albania”

FIAA: What is your impression on the current business operating environment in Albania?

Mrs. Vlahutin: Despite its dominant role in the economy, business is held back by significant shortcomings in the regulatory environment and the rule of law. To Business Operating in Albania, the challenges remain mainly related to judicial system, property rights enforcement, contract enforcement, fight against corruption and informality.

Whereas, Albania has great potential to develop in terms of its geographical position, natural resources, and relatively cheap labor force, it still has to improve labor skills, to improve trade logistics, reduce the regulatory burden to businesses and ensure law enforcement in order to increase its competitiveness and attract foreign investors.

FIAA: What are your impressions of the business operating environment in Albania currently?

Mr. Canacaris: The environment has improved a lot in recent years, especially after the international crisis of 2008. For sure the growth in 2016 is much higher than in 2015, which was higher than 2014. The overall environment is not so bad. Of course, it can always improve.

What have been some of the drivers of this change in recent years?

The payment of the arrears by the state was an excellent move; the state needed to do it and it did it properly. And the power reform was also a good move; it has improved the business climate.

FIAA: What are your expectations for the Albanian economy for the remainder of 2016?

Mrs. Ekonomi: The Albanian economy faced difficulties during 2012 – 2013, partly due to the global crisis which made the economic model unsustainable – a model depending on remittances, debt and the construction sector. In 2013, the Government started to stabilise the fiscal environment in the country, having the support of the IMF through the 3-year agreement and the World Bank.

FIAA IN A FEW WORDS

The Foreign Investors Association is the most important business association in Albania, operating mainly as a supporter and facilitator of foreign investors in the country. The organization operates through a membership scheme and offers various business services to foreign investors. FIAA represents the largest and most prominent businesses operating in various sectors of Albanian economy with the main aim to cooperate with the government and other institutions for a better investment climate and favorable socializing atmosphere in order to attract more foreign investors in Albania.

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